Bank of America Securities: Increased production capacity of pulp and tissues drives growth; raises target price of Lee & Man Paper Manufacturing (02314.HK) to HK$4.5.

According to the Zhitong Finance APP, Bank of America Securities released a research report stating that Lee and Man Paper Manufacturing (02314.HK) saw a recovery in profit margins for containerboard and tissue paper businesses in the first half of the year, with a 12% increase in sales, driving a 69% year-on-year growth in net profit after tax. Management revealed that it was still able to raise prices in the traditionally quiet second quarter of the containerboard market, indicating that the market has gradually recovered from the overcapacity of recent years. With the peak season approaching in the second half of the year, Bank of America Securities expects profit margins to further improve. In response to the improved profit margin outlook, the firm has raised its earnings forecasts for 2026, 2027, and 2028 by 23%, 11%, and 7% respectively, increasing the target price from HKD 3.8 to HKD 4.5, while maintaining a "buy" rating.